Adeno-associated virus type 2 (AAV) is a non-pathogenic human parvovirus which is being developed as a gene therapy vector. The Rep68 and Rep78 proteins (Rep68/78) encoded by AAV are DNA-binding proteins involved in AAV replication, AAV gene regulation, and the preferential integration of the AAV genome into a region within the q arm of human chromosome 19 (the only example of site-specific integration in a mammalian virus). Since these two proteins are encoded by the same open reading frame, they are nearly identical in both sequence and function. They bind specifically to the AAV inverted terminal repeat origins of replication (ITRs), and have ATPase, helicase and strand-specific/site-specific endonuclease activities. We determined the directionality of the helicase activity of a maltose binding protein-Rep68 fusion (MBP-Rep68) produced in Escherichia coli to be 3' to 5', which is consistent with a model in which AAV Rep68/78 participates in AAV DNA replication by unwinding DNA ahead of a cellular DNA polymerase. We also demonstrated that single-stranded DNA inhibits the MBP-Rep68 endonuclease activity. Our results also indicate that a secondary Rep binding site in the hairpin form of the AAV ITR is important for the MBP-Rep68 endonuclease activity. Since the DNA binding, endonuclease and helicase activities of Rep68/78 appear to be mediated by multimers of the proteins, we characterized Rep-Rep interactions using a co-immunoprecipitation assay. Interaction between MBP-Rep68 and radiolabeled, in vitro synthesized Rep68 appears to require multiple charged amino acids, some of which are within a cluster which may represent an alpha-helical oligomerization domain. A major problem with current methods for producing AAV gene therapy vectors is that they require cells to be infected with a helper virus, usually an adenovirus or herpesvirus. This can sometimes lead to the contamination of recombinant AAV vector stocks with one of these potentially pathogenic helper viruses. There is strong evidence that the helper virus products are not necessarily directly involved in AAV replication, but may alter levels of cellular proteins required for efficient AAV gene expression and replication. We have therefore been looking for cellular transcription factors whose levels are altered by adenovirus infection and attempting to correlate these alterations with changes in protein-DNA complexes on AAV promoters, as well as changes in AAV gene expression. We have determined that the level of the cellular transcription factor Sp1, which is known to interact with AAV promoters and which is strongly suspected to be involved in positive regulation of AAV genes by Rep68/78, is increased 4- to 16-fold in human cells infected with adenovirus type 5 versus uninfected cells. The timecourse of Sp1 induction by adenovirus roughly correlates with that of the rise in AAV Rep protein levels during adenovirus plus AAV co-infection. This line of research may lead to new AAV gene therapy vector production systems in which the possibility of contamination with helper viruses or helper virus proteins is eliminated.